Kobalt Music, which uses a proprietary technology to speed up the collection of music royalties, has reportedly closed a $60 million Series C round of financing from Google Ventures and Michael Dell.

The New York-based Kobalt built algorithms to help musicians, who often have to wait for long periods of time for royalties, get paid for their work. This has increasingly been a problem in a world where music can be played anywhere at any time, across countless digital platforms.

The following comes Steve Gordon, regarded as one of the top attorneys in the music industry. Last week, he outlined 11 contracts that every artist, songwriter and producer should know. So here’s the first one: management contracts.

In this installment, we will discuss management agreements.

As I wrote in “Now You Know Everything about Music Managers,” managers have never played a more important role in the music business than they do today. If you have taken or are ready to take the next step in your music career, you probably need one.

A good manager advances the career of her client in a variety of ways. Traditionally, a manager provided advice on all aspects on the artist’s professional life, used her relationships to generate opportunities, negotiated deals when the opportunity to do so arose, and helped the artist select other members of the “team,” such as accountants, lawyers, booking agents, and publicists. A manager’s principal job was, however, searching for the “holy grail”—shopping the artist to record labels, particularly the majors, with the hope of signing a lucrative recording agreement. Signing a record deal meant a payday for both the artist and the manager. Managers work on commission, so the goal was to sign with a major label and negotiate the largest advance possible. In the 90’s, when I was a lawyer for Sony Music, we paid advances to new artists ranging from $250,000 to upwards of $500,000. If the artist caught fire, both the artist and the manager could become very wealthy from record sales alone. Those days are largely gone.

Starting in 1999, income from recorded music has declined more than 75%, accounting for inflation. As a result, the major labels (Sony, Universal, and Warner, along with their affiliates) sign fewer artists and pay those new artists far more modest advances. An artist may never get a deal, or may be dropped from the label’s roster much faster than in the past, when labels had spare cash to support a developing artist. For instance, Bruce Springsteen did not catch fire until after Columbia (now a Sony affiliate) released two albums. But, Columbia had faith and supported him through the early disappointments.

Today, with the major labels fighting just to survive, a story like that is far less likely to occur. Labels would rather put their resources behind already established acts, where a return on investment is more certain.
In these days of financial insecurity in the record business, the manager’s role is more important than ever. In the past, once the artist was signed to the major label, the manager’s primary function became to serve as liaison between the record company and the artist. The manager lobbied the label to do more, spend more, and focus more on the manager’s artist. However, due to budget cuts and massive layoffs at the labels, today’s manager does a lot of the work that the label used to do. For example, the manager may take over social networking, search for opportunities to get the artist’s music in movies or commercials, or find branding opportunities with sponsors. And, if the artist can’t find an acceptable record deal, the manager may become the artist’s de facto label and take on the responsibility of securing funding from investors or crowd funding to produce records, arranging physical and digital distribution, and everything else the record companies traditionally do.

The Pro-Manager Agreement (With Pro-Artist Commentary).
In the following PDF, I critique a standard pro-management agreement and explain in the comments the changes an artist should negotiate. There are a number of important terms where the interests of the manager are directly adverse to the interests of the artist. For example, it is generally in the manager’s interest to have a long initial term and several options to extend the duration of the agreement. The artist, conversely, will want to be able to get out of an agreement quickly if the manager is not meeting the artist’s goals. This issue is addressed in the comments for the first paragraph of the pro-management agreement.

Nothing is capable of making you suddenly aware of your mortality more than the moment you realize the music of your youth is now classic rock.

For those who grew up during the ’90s — back when voicemail was a phone message scribbled by your mom on a tattered piece of notebook paper — the transition has been more subtle than in generations past. That’s because, unlike the way it was with radio for decades, we gradually gained the ability to listen to whatever we chose whenever we wanted and could ignore whatever recent trends began taking hold.

The Music Xray blog has been named by Musicians Empowered as a top music industry blog. It’s an honor.

Tuesday would have been Steve Jobs’ 60th birthday. The late Apple co-founder was famous not only for the Macintosh computer, iPod and iPhone but also for his eloquent musings on everything from LSD to entrepreneurship. The tech mogul was known for his direct style of speaking and his charisma, especially on display in his keynote speeches at Apple events. They often ended with Jobs feigning forgetfulness, saying the phrase “And one more thing…” and then debuting a revolutionary new product.

Jobs died at age 56 on Oct. 5, 2011, after a lengthy battle with pancreatic cancer. Before he lost consciousness, Jobs looked at his sister, children and wife and repeated the words “OH WOW” three times, according to his sister’s eulogy in the New York Times. She wrote Jobs’ last words in all capital letters.

He left a legacy of innovation and a treasure trove of memorable quotes. Read 10 of the best below, courtesy of Business Insider, Wikiquote and Goodreads:

“Don’t let the noise of others’ opinions drown out your own inner voice.”

“The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.”

“I’m as proud of many of the things we haven’t done as the things we have done. Innovation is saying no to a thousand things.”

“We don’t get a chance to do that many things, and everyone should be really excellent. Because this is our life. Life is brief, and then you die, you know? And we’ve all chosen to do this with our lives. So it better be damn good. It better be worth it.”

“Quality is much better than quantity. One home run is much better than two doubles.”

“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while.”

“It’s better to be a pirate than to join the navy.”

“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work.”

“That’s been one of my mantras: focus and simplicity. Simple can be harder than complex. You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”

We are thrilled to get “love letters” every week but this week we received a couple we thought we’d share here on the blog.

The number of brick and mortar stores selling music in the United Kingdom has reached an all-time high, despite the falling popularity of physical product.

According to new figures published by the Entertainment Retailers Association (ERA), there were 10,391 outlets selling CDs and vinyl in 2014, up 20% from 8,633 the year before.

ERA CEO Kim Bayley cites an increase in the number of supermarket convenience stores and discount stores like Wilko and Matalan selling a limited range of music and video product as a contributing factor behind the growth.

The future record business could be huge. Despite the potential, revenue growth is going to be modest in the next five years, says music industry veteran Tom Silverman, founder of Tommy Boy Records and executive director of New Music Seminar. He does not warn that downloads and CDs will fall off the proverbial cliff. He does not expect an explosion of streaming revenues. Instead, he sees a steady transition to new business models over the next five years.

Two years ago, Silverman talked about “the $100 billion music business” that’s waiting for labels and digital service providers.

According to a report released this week, ISIS in Libya have reportedly released photos of members burning musical instruments.

The photos, posted on The Daily Mail on Feb. 18, show masked ISIL members holding weapons, looking on as piles of drums burn in front of them. The instruments were allegedly seized by ISIL police and later burned near the eastern Libyan city of Derna.

“Hesbah seized these un-Islamic musical instruments in the state of Warqa [also known as Derna],”,” according to a statement posted on the Daily Mail’s website.

A year ago, the biggest contemporary stars on the Oscar telecast were two of the original song nominees, “Let it Go” and “Happy.” This year, you’d be hard-pressed to find one person who could hum two of the nominated melodies.

Oscars 2015: See All of Our Coverage

While the songs nominated for the 87th annual Academy Awards are less familiar – we might never see the cultural saturation of last year’s tunes – they play equally important roles in their films.

Oddsmakers in London have Common and John Legend’s “Glory” out front as an even money favorite and it’s not surprising considering how it has timing and cultural momentousness on its side.